National Economy of India - General Knowledge Multiple Choice Questions and Answers

Questions
1 The symbol of Reserve Bank of India is
A Tiger before a Palm tree
B Capitol of Asokan Pillar
C Kuber with a purse of money
D A Dog sitting in a defensive state

Answer: Option [A]

The symbol of Reserve Bank of India is tiger before a palm tree. The logo of the Reserve Bank of India comprises a tiger walking underneath a palm tree. It is contended that the Reserve Bank of India copied the tiger and palm tree symbol from the gold Mohur issued by the East India Company in the 19th century.

2 The achieve high rates of growth of national output, the economy has to
A Borrow foreign capital
B Step up the rate of savings
C Reduce the rate of growth of population
D Increase the rate of investment and reduce the capital output ratio

Answer: Option [D]

The achieve high rates of growth of national output, the economy has to increase the rate of investment and reduce the capital output ratio.

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3 National income refers to
A Money value of stocks and shares of a country during a year
B Money value of capital goods produced by a country during a year
C Money value of consumer goods produced by a country during a year
D Money value of goods and services produced in a country during a year

Answer: Option [B]

National income refers to money value of capital goods produced by a country during a year. It is an important indicator of the economic activities that are taking place within a nation.

4 Why did the Government ban the import of “Terminator seeds”?
A To contain a virus which can destroy local crops
B These seeds multiply at very slow rates
C These seeds are injurious to human and animal health
D These seeds contain genetically engineered properties to prevent further multiplication

Answer: Option [D]

The correct answer is these seeds contain genetically engineered properties to prevent further multiplication. The Indian government banned the import of terminator seeds on fears the seeds would threaten traditional crops and put the well-being of Indian farmers at risk. The technology would have serious implications on the crop biodiversity. It may lead to gradual extinction of traditional varieties.

5 Merchant Banking is an institution which provides finances to:
A International trade among countries
B Domestic retail trade among
C International aid agencies
D Domestic whole sale trade

Answer: Option [A]

Merchant Banking is an institution which provides finances to international trade among countries.

6 Which amidst the following taxes collected by the Union is NOT mandated to be assigned to the States?
A Service Tax
B Taxes on consignment of goods
C Taxes on railway fares and freights
D Terminal taxes on goods or passengers carried by railway, sea or air

Answer: Option [A]

The correct answer is Service Tax. As per Article 268-A of the Constitution of India, Service tax is levied by Union and collected and appropriated by the Union and States. Service tax is a part of Central Excise in India. It is a tax levied on services provided in India, except the State of Jammu and Kashmir.

7 Inflation is caused by:
A Increase in supply of goods
B Decrease in money supply
C Increase in money supply
D Increase in cash with the government

Answer: Option [C]

Inflation is caused by increase in money supply. Inflation is caused when the money supply in an economy grows at faster rate than the economy's ability to produce goods and services. In our auction economy the production of goods and services was unchanged, but the money supply grew from round one to round two.

8 Open market operation refers to
A Purchase and sale of Government securities by the R.B.I.
B Purchase and sale of bounds and securities by the Central Govt.
C Borrowing by commercial banks from the R.B.I.
D Lending by scheduled banks to non-scheduled banks

Answer: Option [A]

Open market operation refers to purchase and sale of Government securities by the R.B.I. The objective of OMO is to regulate the money supply in the economy. RBI carries out the OMO through commercial banks and does not directly deal with the public.

9 What is the main function of Central Statistical Organisation (CSO)?
A Determination of money supply
B Price determination
C Collection of estimates of national income
D Collection of detail data regarding employment

Answer: Option [C]

The correct answer is Collection of estimates of national income. The Central Statistics Organization, established in 1951, is responsible for coordination of statistical activities in the country, and evolving and maintaining statistical standards. Its activities include National Income Accounting; conduct of Annual Survey of Industries, Economic Censuses and its follow up surveys, compilation of Index of Industrial Production etc.

10 What does National Income mean?
A The total value of all consumer goods produced in the country during a period of one year
B The total value of all capital goods produced in the country during a period of one year
C The total value of all stocks and shares in the country during a period of one year
D The total value of all goods and services produced in the country during a period of one year

Answer: Option [D]

The correct answer is The total value of all goods and services produced in the country during a period of one year. National income refers to the income earned by a nation's people and businesses in a year. National Income indicates the status of the economy and can give a clear picture of the country's economic growth.

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